Satyendra Pathak
Doha
Industries Qatar (IQ) is expected to post a 19.4 percent growth in 2025 earnings on a normalised basis that translates to an 11.8 percent rise in reported earnings, QNB Financial Services (QNBFS) has said in a report released on Tuesday.
According to the report, IQ’s growth momentum is expected to continue in 2026, with earnings forecasted to increase by 5.5 percent.
Over the 2024-2030 period, IQ’s normalised earnings are anticipated to grow at a compound annual growth rate (CAGR) of 2.8 percent, QNBFS stated in its report.
Reaffirming its “Accumulate” rating on IQ, QNBFS has raised its price target from QR15 to QR15.20, citing strong fundamentals and favorable market conditions. Despite a slow start to the year, IQ shares have delivered a total return of 3.2 percent year-to-date, outperforming the QE Total Return Index, which has gained 1.8 percent over the same period.
Several key factors are expected to drive IQ’s growth in the near and medium term. One of the most immediate catalysts is the company’s recent QR1 billion share buyback programme, representing 4.1 percent of its free-float market capitalisation, which could boost investor sentiment and provide upward momentum to the stock.
Additionally, the report highlights the strengthening of Middle East urea prices, which have risen 13 percent year-to-date to $410 per metric tonnes. Although prices peaked at $445 per metric tonne in February due to seasonal factors before easing on weaker Indian demand and increased European production, IQ’s average realised prices remain strong, providing an earnings tailwind for the first half of 2025.
Further potential upside could come from IQ’s possible acquisition of the remaining 50 percent stake in Qatar Fuel Additives Company (QAFAC), which could add approximately 9 percent to its earnings per share. However, QNBFS noted that there is no certainty that a deal will materialise.
IQ is also preparing to commission a 350 KTPA polyvinyl chloride (PVC) plant in the second half of 2025, with a net investment of QR455 million. In addition, its effective stake in Qatar Vinyl Company (QVC) is set to rise from 25.52 percent to 44.8 percent by May 2026, potentially contributing another 3 percent to earnings growth.
A major long-term growth driver is the Blue Ammonia (Ammonia-7) project, scheduled for a mid-2026 launch. This initiative is expected to accelerate earnings by around 10 percent while also bolstering IQ’s environmental, social, and governance (ESG)
credentials.
In the longer term, the company could explore acquiring Total’s 20 percent stake in Qatar Petrochemical Company (QAPCO) when their joint venture agreement expires in 2029, which could add approximately 5 percent to earnings per share.
At present, IQ trades at 16 times its projected 2025 earnings per share (EPS), below its historical median of 16.3 times, suggesting limited downside risk. The company also offers an attractive dividend yield of 6.3 percent for 2024 and 6.6 percent for 2025, making it an appealing investment opportunity.
Looking ahead, IQ’s earnings for 2025 are projected to reach QR5 billion (QR0.83 per share), marking an 11.8 percent year-on-year increase. In 2026, earnings are expected to climb 5.5 percent to QR5.3 billion (QR0.88 per share).
EBITDA is forecast to grow by 12.5 percent in 2025 to QR7.2 billion and by 8.1 percent in 2026 to QR7.8 billion, translating to an expected EBITDA CAGR of 3.9 percent from 2024 to 2030.
IQ is also expected to maintain a high dividend payout ratio of approximately 100 percent until EPS surpasses QR1. Despite this, the company’s strong balance sheet remains a key strength, with an estimated QR8.8 billion in cash and equivalents after second-half 2024 dividend payments and zero long-term debt. IQ has ample internal resources to fund its QR12.6 billion capital expenditure plan for 2025-2029.
In 2024, the company generated QR4.6 billion in operating cash flow and QR1.3 billion in free cash flow, with a projected free cash flow yield of approximately 5 percent through 2030. These financial strengths position IQ to weather market fluctuations while maintaining the flexibility to seize new growth opportunities.
In the short term, oil and urea price trends will be crucial in shaping earnings, investor sentiment, and the stock’s trajectory.
Meanwhile, the repoprt said, the ongoing share buyback programme could help sustain stock momentum. Over the long term, strategic projects such as Ammonia-7 and potential acquisitions remain key growth catalysts.
“With its robust financial position, steady earnings expansion, and attractive dividend yield, IQCD presents a favorable risk-reward profile for investors looking to accumulate positions in the stock,” the report concluded.
